JUNE 2019 | MARKETWATCHMAG.COM | MARKET WATCH 33Competition from other alcohol retailers
is strong throughout the country, according
to Alvarez-Peters, and she adds that internet
competition is also a factor. While Costco
doesn’t do online beverage alcohol sales in
the United States, it does offer beverage
alcohol e-commerce in Mexico and the
United Kingdom. Alvarez-Peters says the
company is currently looking at the possi-
bilities for domestic online beverage sales.
The Treasure Hunt
Costco’s business model involves displaying
limited SKUs and fostering a “buy it before
it’s gone” mentality. In beverage alcohol,
that means highlighting specific wines, spir-
its, and beers for a short amount of time and
then swapping in new labels. “Our constant
goal is to bring newness and excitement to
our members,” Alvarez-Peters says. “We
keep our eyes on trends and test a wide
range of items throughout the United States. Our buyers
share ideas and concepts while looking for the best quality
and values to bring to market.” Overall, Costco stores sell
roughly 4,000 total product SKUs. Within that mix, the
drinks department is relatively small. On average, the store’s
beverage areas showcase about 150 wine SKUs, 45-60 spirits
SKUs, and 14-18 beer SKUs.
The wine trends at Costco reflect larger trends around the
country. Alvarez-Peters says domestic Cabernet Sauvignon,
Pinot Noir, and red blends do well, and that imported rosés,
Proseccos, Bordeaux, and wines from Italy, Argentina, and
Spain garner a lot of interest. The company’s top-selling
wine labels include Meiomi Pinot Noir ($15-$21 a 750-ml.,
depending on location), La Crema Chardonnay ($13-$20),
Kirkland Signature Cabernet Sauvignon ($8 a 1.5-liter),
Ménage à Trois red blend ($7-$11 a 750-ml.), and Kirkland
Signature Asolo Prosecco ($7).
Costco’s proprietary label, the Kirkland Signature brand, is
well-received in stores. The company developed its first Kirk-
land Signature wine in 2003 and added spirits to the portfolio
in 2007. Today, Kirkland Signature has 30 wines and 20 spir-
its offerings, though many are only available at certain times
of the year. “Kirkland Signature alcohol products do well for
us,” Alvarez-Peters says. “Our members are loyal and have a
high trust level for Kirkland products. We’re proud of the
quality and value we develop with our supply partners.”Costco offers roughly 150 wine SKUs (wine display top) at its warehouses. Its proprietary
label, Kirkland Signature, includes 30 wines. The Kirkland Signature Asolo Prosecco
(cases above) and Cabernet Sauvignon are among the company’s top-selling wine labels.